The Senior Citizen Savings Scheme (SCSS) was launched by Government of India in 2004. As the name suggests, the scheme is targeted at retired people looking for safe and assured source of income. SCSS aims to provide guaranteed and regular income to the senior citizens in the form of interest payment on quarterly basis.
Key Points to Note
- While investment in SCSS qualifies for Section 80C deduction, interest income is taxable.
- Maximum deposit allowed is Rs 15 lakhs. If you are looking to invest for tax saving, note maximum deduction under 80C is restricted to Rs 1.50 lakhs in a financial year. Thus it may make sense to build up the overall investment corpus in SCSS over multiple financial years.
- Tenor of deposit is 5 years. This can be extended for further 3 year period.
- Loan against SCSS is not permitted
- HUF and NRI are not allowed to invest in SCSS.
Advantages of SCSS
- One of the best investment option for Section 80C investment for Senior Citizens. Interest rate on SCSS is about 0.70% higher than PPF.
- Government guaranteed fixed return investment.
- Regular cash flow in the form of quarterly interest payment.
- Premature withdrawal allowed after 1 year, subject to penalty which varies from 1.5% to 1.0% depending on the completed period (1.5% for completed period between 1 and 2 years, 1.0% for completed period exceeding 2 years).
Interest Rate on SCSS
Interest Rate on SCSS is notified on quarterly basis. Once investment is done, interest rate is fixed for the 5 year tenor.
Given below is the applicable interest rate for SCSS since its inception in 2004:
| FY | Quarter | Start Date | End Date | Interest Rate |
|---|---|---|---|---|
| Till FY12 | Till FY12 | 2004 | March 31, 2012 | 9.00% |
| FY13 | Q1 to Q4 | April 1, 2012 | March 31, 2013 | 9.30% |
| FY14 | Q1 to Q4 | April 1, 2013 | March 31, 2014 | 9.20% |
| FY15 | Q1 to Q4 | April 1, 2014 | March 31, 2015 | 9.20% |
| FY16 | Q1 to Q4 | April 1, 2015 | March 31, 2016 | 9.30% |
| FY17 | Q1 to Q2 | April 1, 2016 | September 30, 2016 | 8.60% |
| Q3 to Q4 | October 1, 2016 | March 31, 2017 | 8.50% | |
| FY18 | Q1 | April 1, 2017 | June 30, 2017 | 8.40% |
| Q2 to Q4 | July 1, 2017 | March 31, 2018 | 8.30% | |
| FY19 | Q1 to Q2 | April 1, 2018 | September 30, 2018 | 8.30% |
| Q3 to Q4 | October 1, 2018 | March 31, 2019 | 8.70% | |
| FY20 | Q1 | April 1, 2019 | June 30, 2019 | 8.70% |
| Q2 to Q4 | July 1, 2019 | March 31, 2020 | 8.60% | |
| FY21 | Q1 to Q4 | April 1, 2020 | March 31, 2021 | 7.40% |
| FY22 | Q1 to Q4 | April 1, 2021 | March 31, 2022 | 7.40% |
| FY23 | Q1 to Q2 | April 1, 2022 | September 30, 2022 | 7.40% |
| Q3 | October 1, 2022 | December 31, 2022 | 7.60% | |
| Q4 | January 1, 2023 | March 31, 2023 | 8.00% | |
| FY24 | Q1 | April 1, 2023 | June 30, 2023 | 8.20% |
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